Five to watch

By Lawrence Delevingne, Rob Copeland

Tue Nov 1, 2011

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Flexibility and a focus on niche strategies have powered these five young funds to stellar returns despite the market’s volatility

Hedge fund managers are more aware than ever that no strategy is a sure thing. Market gyrations have made hash of the relative-value strategies that rely on historic correlations, while anyone betting on an ever-rising market has been sinking. In this environment, winning traders have been those pursuing ultraspecialized bets or maintaining the flexibility to unsentimentally dump losing positions.

Each year AR’s annual Funds to Watch feature profiles some of the most talented managers of small funds, focusing on those running strategies with less than $500 million in capital and at least one year of performance. While finding candidates worthy of the list has always been a difficult exercise, the challenge has never been more formidable than in today’s baffling markets. With most funds in the AR database losing money through September, AR had to find firms that profited regardless of their expectations for the market’s general direction. Although several...

ISSN: 2151-1845 / CDC10004H

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